Amazon DSP Ads vs Sponsored Display: Which Works Best for Your Business?

Selecting the appropriate types of ads plays a key role in building a robust marketing plan for your Amazon FBA business. Amazon offers a wide range of choices, including Amazon DSP Ads and Sponsored Display Ads, providing sellers with a wide array of opportunities to promote their brand effectively.

As an FBA seller on Amazon, you hold the reins as the advertiser for your products. Amazon offers a multitude of options for your product ads, allowing you to determine the best choice for your marketing strategy. It’s essential to understand the qualifying criteria, costs, and target placement for these ads.

Feeling puzzled by the differences between Amazon Sponsored Display vs DSP? Don’t worry, we've got you covered! We are going to shed some light on the distinction between Amazon Display ads and Sponsored Display ads on the ecommerce platform and guide you in selecting the most appropriate ad type to boost your sales and elevate your business.

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What are Amazon DSP ads?

Amazon DSP ads, which stands for Demand-Side Platform advertising, involve automated and centralized media buying from various sources. Unlike sponsored display ads, Amazon DSP ads can reach beyond Amazon’s website, even appearing on platforms like Google Ads.

In practice, DSP is an online advertising approach offered by Amazon that caters to both Amazon FBA sellers as well as businesses that do not sell products directly on Amazon’s marketplace. This distinction is one of the main differences between these two ad types.

But why would entrepreneurs consider setting up Amazon ads if they aren’t selling the platform? Primarily, it’s to tap into Amazon’s vast audience. Amazon ranks among the world’s largest companies, generating billions in annual revenue.

Amazon DSP ads encompass various formats, including screen display, audio, and video ads. Investing in DSP ads provides numerous benefits, such as amplifying your brand visibility and connecting with your ideal customer base.

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What are Amazon Sponsored Display ads?

In contrast to other Amazon PPC ad formats like Sponsored Product and Sponsored Brand, Amazon Sponsored Display Ads offer the flexibility to target a broader audience both on and off the Amazon website. As an Amazon seller, you can leverage these ad types to expand your online presence beyond that of the Amazon marketplace.

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Sponsored Display Ads do not have a minimum daily ad spend requirement, thus making them accessible to sellers with varying budgets. The primary objective of these ads is to connect potential buyers based on their purchasing behaviors. Each click on your ad directs prospective buyers directly to your Amazon store, driving traffic and increasing the likelihood of conversions.

By utilizing Amazon Sponsored Display Ads, you can extend your reach to a wider audience and potentially attract more customers to your products.

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How do I start advertising on Amazon?

When it comes to planning your online marketing and advertising strategy, there are some important aspects to consider:

• Are you eligible?
• Types of advertising and their related costs (DSP vs Sponsored Display)
• Creative control over the ads

Let’s delve deeper into these points so that you can determine the best plan for your own advertising strategy.

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Eligibility

Before running Amazon’s Sponsored Display Ads, you need to enroll in the Brand Registry Program. Eligible Amazon FBA sellers as well as some e-commerce entrepreneurs selling outside of Amazon can sign up to run DSP ads through Amazon. You will need the right budget and some foolproof planning.

For complete eligibility criteria and further insights into utilizing Amazon DSP ads, it is recommended that you contact an Amazon Ads account executive.

Creative control over the types of Amazon advertising

A significant difference between Amazon DSP ads and Sponsored Display is the availability of programmed, managed-service options, and self-service options for advertisers. As an Amazon FBA seller, you have full control over managing your Sponsored Display ads through Amazon’s self-service platform. This allows customization based on market research and other strategies to effectively target customers for your Amazon store. 

In contrast, Amazon DSP ads provide a choice to leverage Amazon’s own creative options for ad management. By participating in Amazon’s DSP ads program, you can access programmatic advertising, which involves automated buying and selling of digital ad space (including display, audio, and video) on websites.

To qualify for Amazon’s managers-service option for DSP ads, a minimum ad spend of approximately $50,000 is typically required.

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How do Amazon DSP and Sponsored Display compare in cost?

The Sponsored Display PPC ad structures versus the unique DSP cost structure will vary in budget and ad outlook. As a successful entrepreneur, you should carefully measure the different costs of each type of ad so that you can effectively manage your marketing spend, and know which types of ad(s) work best for your business.

Here's the main difference between Amazon DSP and Sponsored display ads when it comes to costs: DSP ads go by Cost-per-mile (CPM) and Sponsored Display ads are by Price-per-click (PPC). 

• ‍CPM (cost-per-mile): The average cost that advertisers pay to get 1,000 impressions on their ads. ‍
• PPC (pay-per-click): The average cost that an advertiser (you) is charged when someone clicks on your ad, regardless of whether the item is purchased or not.

FBA sellers enjoy the flexibility of setting their own budget for Sponsored Display ads, with no minimum daily requirement. However, Amazon’s managed-service option for DSP ads typically entails a minimum ad spend of approximately $50,000, varying by country. To stay updated, refer to Amazon’s guidance for the latest information.

Calculating your conversion rates is a valuable approach to determining the most effective Amazon ad type for your business. Additionally, aligning your ad strategy with your goals, whether it’s brand awareness or driving traffic to your store, will ensure you select the correct ad format to boost your business in 2023 and beyond.

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